Supply chain Management (SCM) is the backbone of major food producers in the food and beverages industry that is pegged at US$ 1351 Billion, but not without shortcomings. Let’s see some of the blockchain use cases in food and beverages supply chain that can help tackle some of the industry related pain points effectively.
What is the role of Supply chain management systems in the food and beverages industry?
Supply chain management ensures that every single process is closely knit and controlled by the people involved in processing, storing, transportation and passing on to the distribution center. Every step of the supply chain needs to be closely monitored to avert possible fraud and unnecessary overhead costs.
How can Blockchain impact the Food and Beverage Supply chain?
To explain how the technology can improve the current systems further, here are some of the Blockchain Use cases in food and beverage supply chain management (SCM) below.
Quality Audits & Curbing Food Fraud
According to a research by PricewaterhouseCoopers, nearly $40 Bn is being lost on food fraud and 1 in 3 producers are affected by it globally. Food fraud occurs through malignant suppliers who either mix adulterants with the ingredients or the final product and pass it off as genuine products. The end consumers don’t know that they are consuming a potentially harmful product and in turn over long-term usage, have health problems. Internet of Things (IoT) and Blockchain technology in supply chain management (SCM) makes sure that every ingredient’s lifecycle is documented along with proof of every stage by attaching sensors to collect various information about each batch of produce, this data can be used for effective auditing and to pinpoint & contain the source of the problem, if they encounter any. The food and beverage industry is time sensitive, applying blockchain technology can reduce the delay caused by the auditing process by transparently displaying all the necessary data in one place for all the parties involved to see.
Prevent Wine Counterfeiting
Due to the high value involved, wineries are one of the most fraud-prone industries around. Even to this day, nearly 20% of the wine in the global market (Nearly US$3 Billion) is found to be counterfeit. Trust among wine producers has sunk because of the Wine fraud the industry faced circa 2008. A private collector, Rudy Kurniawan sold cheap bottles of wine to auction houses, under the pretext of selling 1947 Château Lafleur, a vintage wine that was sold for $10 Million. His contribution alone to the wine fraud is estimated at around US$550 Million. With the help of IOT and blockchain, from the production stage to storage and bottling phase, the winery can imprint the entire journey of the wine, right from the source of the grapes to consignment in which the wine arrived. This immutable record can help auction houses and individuals to verify the authenticity of the wine without falling prey to fraud.
Experiential Consumer Marketing
Blockchain increases the Supply chain data. It’s every consumer’s right to know where all the ingredients of the food product they are consuming is coming from. Telling the story of each ingredient’s journey along with vital statistics like source, temperature log at different point of time, storage conditions etc not only increases engagement with the brand, it also subliminally builds trust with the brands that so far very few have enjoyed. This level of transparency ensures that any doubt that the customer has about the product is eliminated as all the data they need is right at their fingertip. Knowing that they get only the finest ingredients, they would obviously go for the best.
Incentivizing using loyalty programs
Building a loyal following around any brand is essential for it to grow. Loyalty programs are a great way to engage and incentivize regular customers, as well as help, acquire new customers. Earlier, it used to be hard to structure a program that would benefit the customers and the brand itself. In the era of blockchain technology, it becomes easy to reward them in a more simple and platform native cryptocurrency that has bonuses in it. As a brand, you can tie up with other brands to allow customers to pay using your cryptocurrency. Brands like Starbucks are heavily investing in the blockchain technology for offering various programs that allow its customers to earn cryptocurrency rewards that can be used to pay for coffees and other products across its outlets and partner outlets.
These are some of the blockchain uses cases in the food and beverage supply chain which we feel would tackle most problems in the industry. If you have any points to add, do share your thoughts below.